Pound Rises to Highest Value in 6 Weeks

The major currency of UK, Pound has strengthened to a value that’s the highest in last 6 weeks as the industrial production in the country increased more in February, than the forecasted value. This boosted the speculation that United Kingdom may be able to avoid a triple dip recession. In last 5 days, this is the 4th time when Sterling has been able to gain against greenback as other gauges for industries such as retail and manufacturing showed improvement as well. In the last month, Pound has been able to post a gain of 1.7%, thereby trimming 2013’s decline to 4.5%. Incidentally, after Yen, Pound is the second worst performing currency in the world for 2013. On the other hand, the UK Government bonds experienced a decline as the 10-year securities attached the lowest demand since last June.

According to the departmental Head of Investec Bank’s Corporate and Institutional Treasury Desk, Lee McDarby, production figures have been taken very well by investors. McDarby added that it’s good to see that Sterling has got boost from good figures. He added that the triple dip recession will be avoided now.

Pound has increased by 0.5% and it is now at $1.5324. On 5th April, it increased to $1.5363, marking its strongest value since 20th February. Against Euro, Pound experienced a decline of 0.2% and it is now at 85.45 pence per Euro. At one point of time, it declined to 85.60 pence per Euro, marking its weakest value since 25th March.

Industrial output of UK expanded by 1% in February, after dropping by 1.3% in January, as data released by the Office for National Statistics. Incidentally, it was predicted that the gauge will increase by 0.4%. Another report on the manufacturing industry showed that the same has expanded by 0.8%. On the other hand, the British Retail Consortium stated that its measure of the retail sales increased by 1.9% in March, from the value of a year earlier.

The yield for last 10 years increased by 4 basis points and the same is now at 1.74%. On yesterday, it rose by 7 basis points. The 1.75% bond which is due on September, 2022 experienced a decline of 0.375, thereby taking the face amount to 100.08. Today, the Debt Management Office sold 4.5 billion pounds of the benchmark 10-year securities at yield of 1.734%.